People do not refer to a dictionary every time they learn the meaning of a word... most words can be defined by looking at context in which they are used, and as a result, we have people using the same words with various different meanings. For the purposes of this article, let me define the terms Capitalism and Socialism, in order to make my point.
Capitalism - Capitalism occurs when the mean so of production are in private hands. In this system, the role of the state is to do whatever it must to protect private business from failure, and regulate as is deemed necessary.
Socialism - Socialism occurs when the means of production are commonly owned. The role of the state is to act as a conduit to enforce the public will in the production process.
From what I gather, these are the two most common definitions of these words. These two definition are virtually identical.
The role of the state under our definition of capitalism is to control business. The role of the state in our definition of socialism is to control production. Business and production are the same thing. Trade occurs in capitalism either to fulfill a production need or to consume a product. Obviously, under socialism, resources will still be sent back and forth in order to produce something for consumption. Again, capitalist business and Socialist production have the exact same meaning.
If the role of the state under capitalism is to regulate business and protect them from failure, does it matter that the means of production are privately owned? After all, to assume a position of regulating business as they see fit, the state assumes a position of control. Not to mention the position of deciding who is worth bailing out and who is not. As more and more regulations are written, and more and more state control is put on private business, the term private becomes a mere technicality. Ownership is about control. If the state operates businesses as they see fit, why not simply claim ownership and admit that they are the ones running things? Well, in America it's because the citizens wouldn't allow it, at least not yet.
Our definition of socialism already defines the state as the people in control. Sure, they claim to do what the people want, but have you seen the government's approval ratings lately? And who among us really knows anyways? Ron Paul could be the most popular politician in the country and lose every election he runs in because as private individuals, we don't know who everyone is voting for. It seems pretty clear the election process is not 100% honest... So I think it's pretty safe to assume the state will do whatever they want, regardless of what the people think under socialism...
If these two systems are the same, why the conflict? Well, my theory is that it gives people the illusion of choice. But these two systems are really not the same. There is little difference between a republican who says he thinks regulated free markets work and a democrat who wants to overhaul various sectors because free markets don't work. Neither of these people believe in free markets; both believe in central control.
The real confusion here exists because this is a poor definition of capitalism. Capitalism is not about regulating business and bailing out losers. In fact, that is what fascism is about. Capitalism is about letting people make decisions with their property freely, so long as they don't infringe on anyone else's property. As far as the role of the state goes, capitalism is not a system in the planning sense of the word. In a pure market, there is no central authority enforcing systematic decisions. There is only private property working in a constant flux to satisfy ends of people. Nobody is forced to give the state money for any service.
In a previous blog post I discussed customary law, if you think the state is needed to enforce private property rights, I suggest you study customary law.
So am I saying fascism and socialism are the same thing? Technically no, but operationally yes. Both systems are about state control of business (and both have lead to mass murder by the state, surprisingly socialism more than fascism. Joseph Stalin was more of a blood thirsty tyrant than Adolf Hitler). Under socialism, the state admits control by assuming direct ownership. Under fascism, control of the production means are left in "private" hands, while the state issues orders telling everyone what to do.
The lesson here: define your terms before you go around saying capitalism is bad because of the bailouts. Indeed, define your terms correctly before you go around saying you even live in a capitalist country.
---"Omnipotent Government" by Ludwig Von Mises is a great work regarding socialism and fascism---
A little long, but here goes:
ReplyDeleteThere are two patterns for the realization of socialism.
The first pattern (we may call it the Lenin or the Russian pattern) is purely bureaucratic. ...
The second pattern (we may calI it the Hindenburg or German pattern) nominally and seemingly preserves private ownership of the means of production and keeps the appearance of ordinary markets, prices, wages, and interest rates. There are, however, no longer entrepreneurs, but only shop managers (Betriebsfiihrer in the terminology of the Nazi legislation). These shop managers are seemingly instrumental in the conduct of the enterprises entrusted to them; they buy and sell, hire and discharge workers and remunerate their services, contract debts and pay interest and amortization. But in all their activities they are bound to obey unconditionally the orders issued by the government's supreme office of production management. This office (the Reichswirtschaftsministerium in Nazi Germany) tells the shop managers what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. It assigns every worker to his job and fixes his wages. It decrees to whom and on what terms the capitalists must entrust their funds. Market exchange is merely a sham. AIl the wages, prices, and interest rates are fixed by the government; they are wages, prices, and interest rates in appearance only; in fact they are merely quantitative terms in the government's orders determining each citizen's job, income, consumption, and standard of living. The government directs all production activities. The shop managers are subject to the government, not to the consumers' demand and the market's price structure. This is socialism under the outward guise of the terminology of capitalism. Some labels of the capitalistic market economy are retained, but they signify something entirely different from what they mean in the market economy. (Human Action, pp. 714-715)
that's all i'm sayin, lol. people who have already read works like human action understand this stuff... i direct this blog at those who don't really have enough interest to read a book like human action...
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